We Plan to Expand from 500 to Over 2,000 Hotels in 2015 – Ritesh Agarwal, CEO, OYO Rooms

OYO Rooms, a marketplace for budget hotels, was started by its CEO & Founder Ritesh Agarwal in June 2013 to change the way people look for and book hotels. The chain moved quite fast to establish a new niche for travel eCommerce in the country, in order to get a sense of what it takes to scale a startup in this segment iamWire caught up with him to see how this growing business is doing.

iamWire: In past few months, OYO has grown from 30 hotels to 500 and from Gurgaon to more than 18 cities. What is the secret sauce behind scaling up so fast?

OYO Rooms is now India’s largest network of budget hotels, with more than 5,500 rooms in 500 hotels across India. Our business model allows us to scale quickly – we are asset light and this unique model is a great fit for the hospitality market in India. We can add a new hotel to our network within a week of signing the agreement.

Another critical enabler is the high performing team of accomplished professionals who are managing this growth. We have in our team experienced professionals from industries as varied as consumer goods, healthcare, management consulting, and retail. We have also innovated incessantly to set up robust systems and processes to drive this growth.

iamWire: What has been the biggest challenge related to expansion?

We are building a company that will survive for decades. To ensure this happens, the biggest challenge is always to scale using sustainable systems and processes. And to ensure we build the right technology, systems and processes, you have to put together a great team! So the biggest challenge is to set a high bar for hiring, train people really well, and innovate to get the best processes and technology on board.

iamWire: Who do you consider to be your biggest competitor? What’s your strategy to beat the rising competition in market?

We believe all options that a customer has to spend a night are competition – including your relatives who can offer you a room for free! For consumers, a stay in OYO Rooms delivers an unmatched value, we also allow 3-touch room bookings and even a personal room service through smartphone. We believe there is no other competitor offering similar value proposition.

iamWire: Are you raising funds from Softbank like the media reports say?

Reports seen earlier in the media around our conversations with Soft Bank were incorrect. We will be happy to talk about our fund-raising plans as and when they materialize.

iamWire: How are you utilising the previous funds that you have raised?

We are scaling fast and have set an ambitious target for ourselves- to expand to more than 2,000 hotels in 45 Indian cities by the end of this year. We are also working to establish OYO as a brand that consumers recognize and trust.

iamWire: With ZoRooms and Stayzilla poking Oyo Rooms with their marketing strategies, has any impact been seen on the user behaviour?

Our customers love us. We offer them an unmatched proposition, and share a deep bond with them. There are playful and harmless banters between competitors in every market. These incidents in no way have impacted our customers.

iamWire: Do you see Airbnb as a competition despite of the difference in operating model?

No, we do not see Airbnb as a competition.

iamWire: How many app downloads do you have? What is the share between your mobile and web bookings?

The OYO Rooms mobile app has been downloaded more than 160,000 times and more than 20,000 bookings have been made so far. It ranks among the best-rated apps on Google Play Store and has been featured as one of the top three apps in the ‘Travel & Local’ category.

iamWire: What is the next big thing in the pipeline at OYO Rooms?

We have recently achieved an important milestone of becoming India’s largest budget hotel chain. As of now, our focus is on expanding our network in India. We will keep increasing our availability and will keep adding more consumer centric features to our value proposition.

iamWire: 3 pieces of advice you’d like to give to startups in Travel eCommerce space.